Will EU sanctions choke ruble stablecoin routes into Bitcoin?

The European Union (EU) is intensifying its efforts to disrupt the A7A5 token, a ruble-backed cryptocurrency that is reportedly facilitating billions of dollars in transactions through Kyrgyzstan into European crypto markets. However, recent analyses indicate that the flow of A7A5 accounts for a mere 2.37% of the total Bitcoin trading volume across the bloc.

As reported by Bloomberg News on October 6, the EU has proposed sanctions targeting A7A5, which is issued by the cross-border payments firms A7 and Russia’s state-owned Promsvyazbank (PSB). These restrictions will bar EU-based entities from conducting any transactions involving the token and aim to penalize several banks in Russia, Belarus, and Central Asia that facilitate crypto-related operations.

A7 is associated with Moldovan banker Ilan Shor and is linked to PSB, which faced sanctions from the UK, EU, and US in 2022 due to Russia’s invasion of Ukraine. Garantex, a Russian cryptocurrency exchange instrumental in the development of A7A5, has also been sanctioned, alongside A7 itself, in early 2025.

Notably, despite these efforts, A7 has been expanding its operations. The firm has introduced a digital bill of exchange for international settlements through its subsidiary in Kyrgyzstan, enabling token holders to receive A7A5 on the Tron network or exchange it for Russian rubles.

Recent data from Elliptic indicates about 41.6 billion A7A5 tokens are in circulation as of September 26, valued at approximately $496 million, with total transaction values reaching around $68 billion.

A7A5 Dominates Ruble-to-Crypto Routes

The A7 network serves as the primary conduit for converting rubles into cryptocurrencies. Users typically start by swapping Russian rubles for A7A5 within the A7/Old Vector framework, then trade the stablecoin on the Kyrgyzstan-based exchange Grinex before converting it into dollar stablecoins, primarily USDT. The tokens are deployed on Ethereum and Tron networks before they are sent to end recipients, which may include EU-based virtual asset service providers.

There is also an alternative pathway involving Russia-based OTC and peer-to-peer markets, where users convert rubles to USDT—often using TRON—and the US has previously sanctioned entities like Netex24 and Bitpapa for facilitating these crypto on-ramps.

Garantex, the leading OTC service provider, had to halt operations after Tether froze wallets containing roughly 2.5 billion rubles back in March. Another method relies on regional “transit hubs.” Regulatory watchdogs have noted rapid growth in Kyrgyzstan’s virtual asset service provider (VASP) ecosystem, while Turkish authorities have imposed stricter stablecoin transfer limits in response to routing activities in their jurisdiction.

Connections Between Garantex, Grinex, and A7

The U.S. Treasury has stated that Grinex was established by former Garantex employees shortly after law enforcement actions disrupted their operations, facilitating the continuity of services. Corporate structures are anticipated to converge by late 2024, expecting full operational form by early 2025.

The Treasury further states that A7A5’s design was meant specifically for Russian A7 clients, with Old Vector collaborating closely with Garantex during the token’s creation stages. The Office of Foreign Assets Control (OFAC) has since designated A7 and its subsidiaries along with Old Vector, characterizing A7 as a cross-border settlement platform aiding sanctions evasion.

Today, A7A5 and Grinex are pivotal for ruble-to-crypto exchanges, effectively replacing earlier infrastructures severely disrupted by sanctions.

Ruble Flow as a Fraction of EU Bitcoin Volume

The Bitcoin/euro (BTC/EUR) trading pair dominates exchanges throughout the EU, as revealed in various reports. Kaiko’s latest updates indicate that euro-denominated trading is primarily confined to a select few platforms, with BTC/EUR as the standout pair.

2024 has witnessed a rise in euro trading volumes, with BTC/EUR representing nearly 10% of global BTC-fiat transactions. Few other national-currency pairs, such as Poland’s BTC/PLN and Czech’s BTC/CZK, maintain substantial liquidity on EU exchanges, but they significantly lag behind BTC/EUR trading.

Despite this, public data indicates that ruble-linked liquidity constitutes a relatively small segment of the broader European Bitcoin trading ecosystem. A report by the European Securities and Markets Authority highlights that Bitcoin trading volume on regulated EU venues reached approximately $7.5 trillion during the first half of 2025.

Further analyses from Elliptic as of September 26 revealed that while A7A5 facilitated $68 billion in on-chain transactions, an online speech by A7 founder Ilan Shor pegged the figure at $89 billion. An October 6 report from the Centre for Information Resilience also noted that as of late August, 6% of A7’s payments were directed towards Europe.

Utilizing this percentage suggests a European transaction flow between $4.08 billion and $5.34 billion when applied to Elliptic’s and Shor’s figures. Even with the highest estimate, A7A5-related flows to Europe only comprise about 0.071% of the total first-half 2025 EU Bitcoin volume.

Most notably, this figure accounts solely for the A7A5 channel and overlooks older OTC, peer-to-peer exchanges, regional hub activities, and direct flows from Russian exchanges. When considering these comprehensive channels, which lack full public data but are evident from sanctions targeting, the aggregate ruble exposure to EU Bitcoin markets likely dwarfs the A7A5 figures alone.

A conservative estimate suggests the total ruble-to-Bitcoin flow could be as high as 2.37% of EU trading volume, indicating that while the sanctioned infrastructure holds significance, it operates more on the outskirts of European crypto liquidity rather than within its core.

Implications of EU Sanctions on Bitcoin Markets

The proposed EU sanctions against A7A5 aim to dismantle a particular channel used for sanctions evasion, rather than addressing systemic risks to European Bitcoin liquidity. Given the 2.37% exposure estimate, the blockade of ruble stablecoin pathways is unlikely to immediately disrupt the larger BTC/EUR order books.

These actions, however, do signal an escalation in regulatory cooperation across jurisdictions. The sequential regulatory moves by the US Treasury, UK government, and now EU authorities underscore a united front against the A7 network, reflecting a commitment to target cryptocurrency infrastructures irrespective of geographical boundaries.

For market players, these sanctions translate into compliance challenges rather than immediate liquidity crises. EU-based virtual asset service providers will need to diligently screen for A7A5 exposure and cut ties with imposed entities, yet the prominence of BTC/EUR pairs on established exchanges is expected to shelter mainstream European trading from direct fallout.

The larger question remains whether authorities can maintain stringent enforcement as sanctioned actors seek refuge in new pathways. The disruption of Garantex in March 2025 swiftly gave rise to Grinex within days. Unless regulatory efforts also tackle the underlying demand propelling Russian entities to migrate capital, unforeseen channels are likely to spring up in the wake of the old ones.

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